2019-04-16T10:51:03.172+10:00 How long it really takes to buy your first home

How long it really takes to buy your first home

How long it really takes to buy your first home

How long it really takes to buy your first home

By Su-Lin Tan | 15 Apr 2019

See what’s happening in different cities around Australia and where it might take you less time to save than it has in the past.

The amount of time needed to save for a 20% deposit on a first home in Sydney has fallen by five months compared to a year ago, Domain's latest research shows.

While that is good news for first home buyers, Sydney is also the only capital city in Australia where the price of an entry level home - those in the cheapest 25% of the market - is almost the same as an entry level unit.

It takes the average first home buyer six years and two months to save for deposit on a $650,000 entry-level house and five years and four months to save for a $560,000 basic unit deposit, Domain says.

"Of all the capitals, Sydney has one of the smallest differences between saving for a house or unit. The time difference between saving for a house or unit is just 10 months," Domain senior research analyst Nicola Powell said.

"This largely reflects the proximity of many units to the CBD as well as growing demand for apartment living."

In particular, houses in Warringah, Ku-ring-gai, Leichhardt, Canada Bay and southern eastern suburbs are nearly two years quicker to save for than a year ago.

Reflecting the sharper price fall for Sydney since the downturn started in 2017, the time taken to save for Melbourne deposits on houses and apartments has only fallen by two months.

The Sydney-Melbourne price tumble continues with Sydney house prices now down 13.9% and Melbourne's lower by 10.7% since their peaks in 2017.

Domain says it takes the average first home buyer three years less time to save for a deposit on a house in Stonnington West, Port Phillip and Boroondara than a year ago.

Overall, it takes a buyer five years and nine months to save for a deposit on a $568,000 entry-level home and four years for a $395,000 unit.

While prices in Sydney and Melbourne have fallen, Hobart prices have risen, as the late-bloomer city boomed on the back of the east coast surge. Hobart prices are record high for both houses and units, forcing out many first home buyers.

Buyers are experiencing a six-month blowout in savings time to save to buy a $360,000 house over four years or a $318,000 unit over 3½ years.

The best value for first home buyers is still Adelaide.

Adelaide houses have the third-fastest savings time behind Perth and Darwin, with buyers spending three years and 11 months to save a lump sum entry-level house deposit for a $372,500 home. This is better by one month over the year.

While Perth and Darwin are also cheap for buyers, the two cities are experiencing falling values. Buyers in Adelaide enjoy not only relative affordability compared to other capitals but a steady flat market.

 

This article was originally published by The Australian Financial Review on 1 April 2019. It represents the views of the author only and does not necessarily reflect the views of AMP.

What is estate planning?

Decide how you want to be looked after if you can’t make your own decisions and how you want your assets to be distributed after you

Read more

Reviewing your personal insurance policy: When, why and how

Insurance might not always be top of mind, but it’s important to review your policies regularly to ensure you’ve got the right cover

Read more

Moving interstate? The cost of living in a new Australian city could surprise you

16 May 2019

If you’re relocating to a new city, it’s a good idea to do your homework about living costs…particularly if it’s Sydney.

Read more

Subscribe to our newsletter

Sign up now

Important information

Show more

This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling 13 30 30, before deciding what’s right for you. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.

All information on this website is subject to change without notice. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability for any resulting loss or damage of the reader or any other person.